UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 40049 / June 1, 1998
INVESTMENT COMPANY ACT of 1940
RELEASE NO. 23229 / June 1, 1998
ADMINISTRATIVE PROCEEDING NO. 3-9615
IN THE MATTER OF THE ROCKIES FUND, INC., STEPHEN G. CALANDRELLA, CHARLES M.
POWELL, CLIFFORD C. THYGESEN, AND JOHN C. POWER
The Commission announced today that it instituted public administrative and
cease-and-desist proceedings against the Rockies Fund, Inc. ("the Fund"), a
Colorado Springs closed-end investment company registered with the Commission
as a business development company, its president Stephen G. Calandrella (Calandrella ),
and two independent directors, Charles M. Powell (Powell) and Clifford C. Thygesen.
The Order Instituting Proceedings ( Order ) alleges that the Fund and the three
individuals defrauded investors by materially overstating the Funds net assets between
approximately June 1994 and December 1995.
The Order alleges, among other things, that the overstatement of assets stemmed from
the Funds improper classification of portfolio securities of Premier Concepts, Inc.
(Premier) as unrestricted, that Calandrella caused the Fund to improperly claim ownership
of certain restricted Premier stock, and that Calandrella, along with John C. Power (Power),
another named respondent in the proceeding, inflated the value of the restricted stock held
by the Fund by manipulating the market for Premier stock by engaging in matched orders and
wash sales or trading through nominee accounts.
The Order further alleges that the Fund violated certain of the reporting provisions of the
Securities Exchange Act of 1934 (Exchange Act) by filing with the Commission false and
misleading annual and quarterly reports, and that Calandrella, Powell and Thygesen aided
and abetted and caused the Fund s violations of these provisions.
Finally, the Order alleges that Calandrella improperly accepted compensation for the Funds
purchase of Premier stock in that he caused the Fund to enter into an agreement to pay
$85,000 to one of his business acquaintances in return for, among other things, the
acquaintance's agreement to forego a potential legal claim against Calandrella.
The Order institutes public proceedings to determine whether the Commission should enter an
order requiring: (a) the Fund to cease and desist from committing or causing any violation
and any future violation of Sections 10(b) and 13(a) of the Exchange Act and Rules
10b-5, 13a-1, 13a-13, and 12b-20 thereunder; (b) Calandrella to cease and desist from
committing or causing any violation and any future violation of Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, and Section 57(k) of the Investment Company Act of 1940,
or from causing any violation and any future violation of Section 13(a) of the Exchange Act
and Rules 13a-1, 13a-13, and 12b-20 thereunder; (c) Powell and Thygesen to cease and desist
from committing or causing any violation and any future violation of Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, or from causing any violation and any future violation
of Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13, and 12b-20 thereunder; and
(d) Power to cease and desist from committing or causing any violation and any future violation
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Pursuant to the Order, the proceedings will also seek to determine what, if any, remedial
action is necessary or appropriate in the public interest or for the protection of investors
against Calandrella, Powell and Thygesen, and whether the Commission should seek to impose
civil penalties against them.
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